Royal AM
By Nkosana Khumalo
The South African Revenue Service (SARS) has welcomed the North Gauteng High Court’s decision to strike Shauwn Mkhize’s urgent application from the roll, citing a lack of urgency. Mkhize had approached the court seeking an order compelling the appointed curator to issue a letter of financial assurance to the National Soccer League (NSL), which would have allowed her soccer club, Royal AM FC, to continue playing in the Betway Premiership and Nedbank Cup tournaments.
This ruling is the latest setback for Royal AM, which has been embroiled in legal battles over unpaid taxes and financial instability. The club, owned by businesswoman and reality TV star Shauwn Mkhize, has been suspended from participating in professional football due to ongoing financial and legal troubles.
SARS Applauds Court Ruling on Royal AM’s Urgent Application
SARS Commissioner Edward Kieswetter welcomed the court’s ruling, emphasizing the importance of tax compliance and fiscal responsibility. In a statement issued on Friday, he criticized taxpayers who attempt to use the courts to avoid their legal obligations.
“It boggles the mind that taxpayers will turn to courts with ease yet derelict in their responsibility to meet their obligations with similar enthusiasm. SARS is enjoined by the law to administer the law without fear or favour, and to ensure that all taxpayers who are expected to register, file, and pay their taxes do it with ease.”The ruling reinforces SARS’s commitment to holding all taxpayers accountable, including high-profile business figures and organizations.
Court Finds Royal AM’s Urgent Application “Self-Created”
Royal AM’s urgent application was dismissed by the North Gauteng High Court on 5 February 2025, with the court ruling that the club’s financial struggles were not a matter of urgency. The club sought to force the curator to issue a letter of comfort, guaranteeing its financial stability to the NSL.
In addition to this, Royal AM also requested that the court review the curator’s decision not to issue the letter, arguing that the decision was irrational, unreasonable, and unlawful.
The court, however, disagreed, ruling that the urgency was self-created as the club had been aware of its financial instability for a long time. The ruling confirmed the club’s suspension from the NSL, with no guarantee of when or if it will be allowed to resume playing.
A statement from SARS further outlined the court’s ruling:
“The court stated that procedures and practice notes are not there for the taking; an applicant needs to set out facts showing why the matter is urgent. The urgency was self-created as the club was aware of its precarious position vis-à-vis the curator’s inability to provide a letter of comfort to the NSL, way before it elected to launch the urgent application.”This ruling marks the third court loss for Mkhize and Royal AM, following similar defeats in the Durban, Pietermaritzburg, and Pretoria high courts over tax-related matters.
SARS Confirms Royal AM’s Outstanding Tax Bill of R37 Million
Royal AM’s financial struggles are tied to the Shandi Trust, a business entity linked to Shauwn Mkhize, which owes SARS an estimated R37 million.
This week, two separate court rulings—from the North Gauteng and KwaZulu-Natal Division, Pietermaritzburg High Courts—were issued in favour of SARS in relation to tax preservation orders against Royal AM and Shandi Trust.
The court found that Royal AM had failed to settle its tax debts, leading to the freezing of its assets and ongoing legal action by SARS.
This latest legal defeat for Royal AM raises questions about its future, as the club faces mounting financial and legal pressures.
Msunduzi Municipality Under Pressure to Withdraw R27 Million Sponsorship
Amid Royal AM’s financial crisis, scrutiny has intensified over its R27 million sponsorship deal with the Msunduzi Municipality.
In 2023, the municipality awarded a three-year sponsorship to the club, amounting to R27 million. The deal was meant to boost tourism in Pietermaritzburg, as Royal AM would play home games at Harry Gwala Stadium, attracting soccer fans to the city.
However, following the club’s financial turmoil and suspension, the municipality has withheld the second R9 million installment for the 2024/2025 financial year, citing the club’s failure to submit financial reports detailing how it spent the funds.
Municipality spokesperson Ntobeko Ngcobo confirmed that the sponsorship agreement is now under review due to Royal AM’s ongoing legal issues.
“The club has not yet fulfilled its contractual obligations, including submitting an annual financial report to show how they used the money.”Adding further pressure, the Democratic Alliance (DA) has taken legal action, filing a court application to cancel the sponsorship deal altogether.
DA Pushes for Termination of Royal AM’s Sponsorship Deal
The DA has launched a legal challenge against the sponsorship agreement, arguing that it violates financial laws and misuses ratepayers’ money.
DA councillor Ross Strachan stated that the case will be heard at the Pietermaritzburg High Court on 28 February 2025.
The DA contends that the sponsorship deal was unlawful as Mkhize was already under investigation for tax violations when the agreement was signed.
“The legal department (of the city) is tasked with reviewing the sponsorship contract and evaluating ways of terminating it, and publicly distancing itself from Royal AM.”
“And I am happy that the matter is in court because at least we are going to hold people accountable and get the information and the facts. We are looking forward to winning the court case.”Strachan previously submitted a motion on 21 January 2025, urging the council to debate the sponsorship issue, but the motion was rejected on the basis that the matter was sub judice (subject to court proceedings).
The DA argues that:
• The team no longer benefits the city or ratepayers.
• The team’s brand is attracting negative publicity, damaging the city’s image.
• The contract was awarded in breach of municipal financial regulations.
What Happens Next for Royal AM?
With mounting legal battles, millions in unpaid taxes, and uncertain sponsorship funding, Royal AM’s future hangs in the balance.
The club remains suspended from the NSL, with no financial assurances that it will be reinstated.
If the DA’s legal challenge against the Msunduzi sponsorship succeeds, Royal AM will lose a critical financial lifeline, further pushing it towards possible liquidation.
Meanwhile, SARS continues to enforce tax collection measures, with more court cases expected in the coming months.
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